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Lack of competition in platform economy could undermine its inherent value

News   •   Sep 21, 2020 11:30 BST

Continued dominance of large non-EU service and work platforms could result in an oligopolistic market situation in the EU in the future. This could hamper the market entry of new players, endangering healthy competition and economic and labour market innovation to the detriment of platform workers and consumers, as well as the broader economy.

This is just one of the possible implications of a 'business as usual' scenario for platform work in Europe. As part of Eurofound’s research in the area, the Agency has extensively developed its online platform economy repository, which includes 10 scenarios on how platform work could develop in the future. An overview of three of these scenarios is presented in a new research report, including policy pointers for policymakers and those influential in the sector on what could be done to realise a desirable, and avoid an undesirable, future for platform work in Europe. 

As well as highlighting the challenges that online platforms create in relation to competition, labour market protection, and consumer rights, it emphasises that the low-entry barrier to employment that platform work often provides can be beneficial - particularly to those that wish to supplement their income. At the same time it notes that, even with the influence of rapid technological change on the labour market and economy, it is important to ensure that platform work acts as a stepping stone to standard employment for those who want this, rather than an accelerator of labour market segmentation or crowding out of traditional jobs.

Whether platform work becomes a domain of entrepreneurial innovation and opportunity, or part of the labour market that exacerbates segmentation and a decline in social mobility, could largely be played out over the next decade. Strengthening the collective voice of those platform workers who need representation, or finding other ways to ensure fair terms and conditions for those that feel unrepresented, will be a major aspect of how this unfolds.

Speaking upon the publishing of these resources, Irene Mandl, Eurofound Head of Unit for Employment, said ’Platform work is a not a dystopia, nor should it be viewed as something necessarily having a deleterious impact on the labour market. While there is often a focus on the negative side of platform work, all scenarios show a variety of inherent opportunities, including rural development, fostering entrepreneurial spirit, regularising undeclared work, and the provision of services of public interest. This new research lays out different ways that Europe can capitalise on these opportunities and avoid the platform pitfalls.’

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